73% of Daegu Companies Report Worsened Lunar New Year Economic Sentiment... 4 Days Off for Lunar New Year, Bonus of 520,000 Won

Daegu Chamber of Commerce and Industry.

[Asia Economy Yeongnam Reporting Headquarters Reporter Koo Dae-sun] Ahead of the Lunar New Year, 73% of companies in the Daegu area reported feeling that the economic sentiment has worsened.

The Daegu Chamber of Commerce and Industry announced on the 11th that “a survey on the 2023 Lunar New Year economic trend was conducted over the past two days targeting 274 companies in the Daegu area, and 73.8% felt that the economic sentiment had worsened, an increase of 16.1 percentage points from 53.7% during last year’s Lunar New Year.” Additionally, 20.8% responded that the situation was similar to the very difficult conditions of last year, indicating that companies continue to face hardships. The percentage of companies that felt the situation had improved was 5.4%, a decrease of 9.0 percentage points compared to last year’s Lunar New Year.

By industry, the proportion of companies reporting worsened economic sentiment was 74.4% in manufacturing, up 17.9 percentage points from 56.5% the previous year, followed by construction at 73.3%, and distribution and service industries at 70.6%, showing overall difficult conditions.

Among companies that answered that economic sentiment had worsened (multiple responses allowed), 55.0% cited ‘high interest rates’ as the main cause, followed by 50.5% pointing to ‘rising logistics costs.’

65.3% of companies responded that their financial conditions had deteriorated (multiple responses allowed). By industry, manufacturing was the highest at 66.7%, followed by construction at 64.4%, and distribution and service industries at 58.8%. The main reasons for worsened financial conditions (multiple responses allowed) were ‘increased prices of raw materials and supplies’ at 52.5%, decreased sales at 51.4%, and interest rate hikes at 45.3%, in that order.

This year, the number of days off for companies, including weekends and substitute holidays, is up to 4 days (from the 21st to the 24th), with 89.4% of companies responding that they will take 4 days off. The reasons for working during the holiday period were meeting order delivery deadlines (44.8%) and internal circumstances such as labor shortages (27.6%).

Regarding Lunar New Year bonuses and gifts, 77.7% of all responding companies said they provide bonuses or gifts, an increase of 6.7 percentage points from 71.0% last year. The average rate bonus was 56.9% of the base salary, and the average fixed bonus was 520,000 KRW.

Regarding the economic outlook after the Lunar New Year, 72.3% of companies responded that ‘the economy will worsen,’ while only 21.9% said it would be ‘at last year’s level.’

A representative from the Daegu Chamber of Commerce and Industry said, “Due to repeated base interest rate hikes last year, companies are facing significant difficulties such as financial conditions,” and added, “It is urgent to expand support policies for domestic demand recovery and to increase low-interest management stabilization funds that provide practical help to companies.”